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The influence of different forms of government spending on distribution and growth


  • Commendatore, Pasquale
  • Panico, Carlo
  • Pinto, Antonio


This paper deals with the influence of different types of government expenditure on growth. It widens that proposed by the literature which follows the lines set by Barro (1990) because it adds the changes working through the demand side, generated by the variations in the distribution of the net income of the economy, to those working through the supply side, generated by the variations in factor productivity. The analysis considers a government sector with a balanced budget and an autonomous and nonlinear investment function, interpreted along a Kaleckian and a Classical-Harrodian line. It shows under which conditions different types of government expenditure are beneficial or detrimental for economic growth, comparing some results with those reached by Barro (1990) and points out the emergence of phenomena like multiple equilibria, hysteresis and low growth traps.

Suggested Citation

  • Commendatore, Pasquale & Panico, Carlo & Pinto, Antonio, 2009. "The influence of different forms of government spending on distribution and growth," MPRA Paper 15364, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15364

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    References listed on IDEAS

    1. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    2. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-393, December.
    3. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    4. Dutt, Amitava Krishna, 1992. "Conflict inflation, distribution, cyclical accumulation and crises," European Journal of Political Economy, Elsevier, vol. 8(4), pages 579-597, December.
    5. Pasquale Commendatore & Carlo Panico & Antonio Pinto, 2005. "Government debt, growth and inequality in income distibution: a post-Keynesian analysis," Chapters,in: Innovation, Unemployment and Policy in the Theories of Growth and Distribution, chapter 11 Edward Elgar Publishing.
    6. Pasquale Commendatore & Carlo Panico & Antonio Pinto, 2010. "Government Spending, Effective Demand, Distribution and Growth: A Dynamic Analysis," Chapters,in: Institutional and Social Dynamics of Growth and Distribution, chapter 6 Edward Elgar Publishing.
    7. Gang Gong, 2001. "Product Innovation and Irregular Growth Cycles with Excess Capacity," Metroeconomica, Wiley Blackwell, vol. 52(4), pages 428-448, November.
    8. Giorgio Rodano & Gian Italo Bischi & Enrico Saltari & Roberto Dieci, 2001. "Multiple attractors and global bifurcations in a Kaldor-type business cycle model," Journal of Evolutionary Economics, Springer, vol. 11(5), pages 527-554.
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    Cited by:

    1. Greg Hannsgen & Tai Young-Taft, 2015. "Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model: The Unit of Account, Inflation, Leverage, and Financial Fragility," Economics Working Paper Archive wp_839, Levy Economics Institute.
    2. Greg Hannsgen, 2014. "Fiscal Policy, Chartal Money, Mark-up Dynamics and Unemployment Insurance in a Model of Growth and Distribution," Metroeconomica, Wiley Blackwell, vol. 65(3), pages 487-523, July.

    More about this item


    Distribution; Growth; Government expenditure; post-Keynesian theory; Nonlinearity;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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